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CyrusOne Inc CONE

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Rumors of CyrusOne Sale Drive Stock Higher; Maintaining $66 FVE

Matthew Dolgin, CFA Equity Analyst

Analyst Note

| Matthew Dolgin, CFA |

CyrusOne stock’s 7% pop on Sept. 28 was the result of a rumor reported by Reuters that the firm is working with Morgan Stanley to explore a sale of the company. The rumor is not surprising. Similar rumors have arisen multiple times over the past two years, and executive team instability and mediocre recent performance lead us to conclude that CyrusOne selling itself is a good option. We are maintaining our $66 fair value estimate, as the rumors have no bearing on our forecast, but we concede that a potential acquirer would likely bid higher, as recent years have seen a hot market for data center properties.

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Company Profile

Business Description

CyrusOne owns or operates 53 data centers, primarily in the U.S., that encompass more than 8 million net rentable square feet. It has a few properties in Europe and Asia. CyrusOne has both multitenant and single-tenant data centers, and it is primarily a wholesale provider, offering large spaces on longer-term leases. The firm has about 1,000 total customers, and cloud service providers and other information technology firms make up about half its total revenue. Its largest customer, Microsoft, accounted for over 20% of 2020 revenue, and its top 10 customers generated about 50%. After cloud providers, companies in the financial services and energy industries contributed the biggest proportions of CyrusOne's sales.

2850 N. Harwood Street, Suite 2200
Dallas, TX, 75201
T +1 972 350-0060
Sector Real Estate
Industry REIT - Specialty
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2019
Stock Type Hard Assets
Employees 441